Venezuela said Monday that two Guyanese fishing vessels captured by its navy last week were caught "red handed" fishing illegally in Venezuelan waters, a claim rejected by its smaller neighbor.

The standoff is the latest episode in a century-old territorial dispute between the two South American countries, which has heated up since US oil giant ExxonMobile discovered crude oil in the region in 2015.

Guyana said the two boats were unlawfully seized in its own Exclusive Economic Zone (EEZ) last Thursday.

It claimed in a statement over the weekend that the vessels were intercepted by the Comandante Hugo Chavez, a naval vessel named after the late Venezuelan president.

"The Venezuelan vessel was illegally maneuvering within Guyana's EEZ and Contiguous Zone when it intercepted, boarded and commandeered the Guyanese fishing vessels. The Ministry of Foreign Affairs is currently seeking to ascertain the status and welfare of the crew members," Georgetown said.

Guyana condemned what it termed a "wanton act of aggression by the Venezuelan armed forces."

But Caracas on Monday dismissed Guyana's "defamation."

In a statement, the foreign ministry said the vessels were carrying out "illegal fishing in waters under the full sovereignty and jurisdiction of Venezuela, and without any legal documentation."

In December, Venezuelan President Nicolas Maduro, decreed "a new marine territory" that, according to Guyana, extends into its marine and land territory west of the Essequibo River.

Map of Guyana and its disputed zones
Map of Guyana and its disputed zones AFP / Sophie RAMIS

Guyana condemned the decree as a violation of its sovereignty, and of the fundamental rules of international law.

Caracas has been pressing a historic claim to Guyana's Essequibo region -- almost two-thirds of the former British colony in total -- after the recent discovery of oil.

Guyana maintains valid land borders were set in 1899 by an arbitration court decision in Paris, a decision Venezuela does not recognize.

Caracas, for its part, says a 1966 treaty with Britain ahead of Guyanese independence annulled the earlier agreement.

Last month, the UN's top court ruled it had jurisdiction in a case brought by Guyana, asking it to confirm the validity of the 1899 border.

The court has yet to set a date for public hearings in the case, a process that could take years.

According to a court document, Venezuela contests the ICJ's jurisdiction and has said it would not participate in proceedings.

In recent years, the Venezuelan Navy has intercepted seismic research vessels collecting data for ExxonMobil and another American oil company, Anadarko Petroleum.

Caracas has condemned Guyanese oil exploration in the contested waters, as well as recent joint US-Guyana military exercises in the area.